Connecticut § 33-1105 - Liability for unlawful distribution.

§ 33-1105. Liability for unlawful distribution.

Sec. 33-1105. Liability for unlawful distribution. (a) A director who votes for or assents to a distribution made in violation of sections 33-1000 to 33-1290, inclusive, or the certificate of incorporation is personally liable to the corporation for the amount of the distribution that exceeds what could have been distributed without violating said sections or the certificate of incorporation if it is established that he did not perform his duties in compliance with section 33-1104 or 33-1178a. In any proceeding commenced under this section, a director has all of the defenses ordinarily available to a director.

(b) A director held liable under subsection (a) of this section for an unlawful distribution is entitled to contribution: (1) From every other director who could be held liable under subsection (a) of this section for the unlawful distribution; and (2) from each recipient for the amount the recipient accepted knowing the distribution was made in violation of sections 33-1000 to 33-1290, inclusive, or the certificate of incorporation.

(c) A proceeding under this section to enforce: (1) The liability of a director under subsection (a) of this section is barred unless it is commenced within three years after the date (A) on which the distribution was made, (B) as of which the violation of sections 33-1000 to 33-1290, inclusive, occurred as a consequence of disregarding a restriction in the certificate of incorporation, or (C) on which the distribution of assets to members under section 33-1178a was made; or (2) contribution or recoupment under subsection (b) of this section is barred unless it is commenced within one year after the liability of the claimant has been finally adjudicated under subsection (a) of this section.

(d) For purposes of this section, a director shall be deemed to have voted for a distribution if such director was present at the meeting of the board of directors or committee thereof at the time such distribution was authorized and did not vote in dissent therefrom, or if such director consented thereto pursuant to section 33-1097.

(P.A. 96-256, S. 77, 209; P.A. 03-18, S. 38.)

History: P.A. 96-256 effective January 1, 1997; P.A. 03-18 amended Subsec. (a) by adding reference to Sec. 33-1178a and amended Subsec. (c) by designating existing limitation period as Subdiv. (1) and Subpara. (A), adding Subparas. (B) and (C) barring liability of director under Subsec. (a) unless proceeding to enforce is commenced within three years after date as of which violation occurred as consequence of disregarding restriction in certificate of incorporation or on which distribution under Sec. 33-1178a was made, and adding Subdiv. (2) barring contribution or recoupment under Subsec. (b) unless commenced within one year after final adjudication of liability under Subsec. (a), effective July 1, 2003.